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The former head of Deutsche Bank’s residential mortgage-backed securities trading group has struck a deal with Grosvenor Capital Management for $50 million in startup cash in exchange for a cut of fees earned from his new hedge fund.

Troy Dixon, who managed a group of 70 at Deutsche Bank until resigning in 2013, got off the ground with his new structured-credit-focused Hollis Park Partners last month, people familiar with the firm said.

Dixon is among hedge fund managers looking to take advantage of anticipated volatility in the fixed-income market after years of relatively placid trading encouraged by low interest rates. The vast majority of its portfolio comprises so-called agency bonds backed by a government entity.

Dixon, 43, named the firm after his childhood neighbourhood in Queens. He now lives in Manhattan.

Hollis Park started with roughly $200 million, including $50 million from the Chicago-based Grosvenor, one of the world’s largest investors in hedge funds. There is an arrangement for the firm to buy out Grosvenor’s interest after seven years, making it an unusually long deal for startup hedge funds.